Arizona Real Estate License Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

In a residential loan transaction, the lender is required to provide the buyer with a Loan Estimate disclosure within three business days of receiving the loan application. This requirement is part of the regulatory framework established by the Truth in Lending Act and the Real Estate Settlement Procedures Act (RESPA) to ensure transparency and that borrowers are given enough information about the terms of their loan and the costs they can expect.

The Loan Estimate includes important details such as the estimated monthly payments, interest rates, closing costs, and any other fees associated with the loan. By giving the borrower this information promptly, it allows them to make informed decisions and shop around for the best mortgage options available to them.

Timelines such as from a purchase contract, close of escrow, or loan approval do not apply to the requirement for providing the Loan Estimate because the critical triggering event is the receipt of the loan application itself. This is designed to streamline the process for home buyers and set clear expectations regarding their financing.